The real estate sector has witnessed heady times in the last few years with property prices in major metros having skyrocketed in an environment of strong demand. This has come on the back of factors like a strong economic growth leading to a considerable rise in disposable income, favorable government policies and exponential growth in sectors like IT, entertainment, retailing and hospitality.

The confidence of real estate companies/developers has been amply rewarded on the bourses in the past year when half a dozen of them successfully raised large resources through initial public offerings (IPOs).

However, two significant concerns that have to an extent dampened the dream run for residential real estate are higher interest rates on home loans and a sharp jump in real estate prices.

Rajeev Talwar, Group Executive Director, DLF, told The Hindu, “Nationally, there is unlikely to be a let up in prices. On the one hand, there is good demand and a shortage of supply. On the other, there have been fiscal measures to curb inflation and by encouraging only genuine equity coming in. But new measures must be explored and for starters, there must be new ground rules for private players to buy, develop and sell land, although subject to some norms. Civic infrastructure development must be viewed as a business opportunity. In any scenario, companies with land banks will continue to command a premium.”

Trends differ for different segments of the real estate market, according to Pranay Vakil, Chairman, Knight Frank India, a leading real estate consultancy.

In the commercial property market, there has been a significant upturn in rentals in sympathy with increasing rates.

There has been a mushrooming of malls in the metros and there are more than 20 mega malls with sizes over a million sq. ft. each in various stages of implementation in Mumbai, Bangalore and Delhi.

Source: The Hindu
Read more
Reply
1 Replies
Sort by :Filter by :
  • Is Real Estate a commodity???

    Originally Posted by dushyant


    Rajeev Talwar, Group Executive Director, DLF, told The Hindu, “Nationally, there is unlikely to be a let up in prices. On the one hand, there is good demand and a shortage of supply. On the other, there have been fiscal measures to curb inflation and by encouraging only genuine equity coming in. But new measures must be explored and for starters, there must be new ground rules for private players to buy, develop and sell land, although subject to some norms. Civic infrastructure development must be viewed as a business opportunity. In any scenario, companies with land banks will continue to command a premium.”

    Source: The Hindu


    Well, I wonder whether we should apply the demand and supply theory on real estate or not. Can we treat real estate as commodity???

    What do you say..?
    CommentQuote